Model Rule 1.3

What if you suddenly became disabled and couldn’t handle your law practice? Or, if you were to die, who would deal with your pending matters? Who has the password for your computer? Who knows where you bank? The Ohio Board of Professional Conduct last week published an ethics guide titled “Succession Planning” that addresses these issues, and it’s worthwhile reading if you practice on your own or in a small firm, in any jurisdiction.

Trendlines point to need for planning

Two trends are converging that underscore the topic of succession preparedness: the predominance of solo and small firms, and the graying of the profession.

The ABA reports that in 2005, 63% of all private practitioners were in firms of fewer than five people. And 49% practiced on their own. (Seventy-five percent of U.S. lawyers were in private practice in 2005.)

And we are not getting any younger — in fact, the opposite. The median age of lawyers in 2005 was 49; 13% were over 65 years old. And recent trends are going to increase the proportion of older lawyers: total J.D. enrollment between 2011-12 and 2013-14 decreased by 12%, or by more than 17,000 students. First-year law school enrollment decreased by 29% between 2010 and 2016, and for the 2016-17 school year it remained flat over the previous year.

Be prepared

The Ohio ethics guide notes that “failing to plan for the unexpected can result in harm to clients and in confusion and hardship for the lawyer’s family, staff and professional colleagues.”

Every state’s lawyer conduct rules has some version of Model Rule 1.1 and 1.3, dealing with competence and diligence, and the Ohio guide notes that while having a succession plan is not mandated by the Ohio rules, having a plan “can be viewed as a continuation of a lawyer’s duty of competent and diligent representation.”

Some jurisdictions go further. As of June 2015, the ABA reported that several specifically addressed succession planning in their conduct rules, registration rules or in comments. (A state-by-state chart is here.) For instance, Florida requires the designation of an “inventory attorney,” who can agree to take action in the event of a lawyer’s death or disability. Indiana provides as part of its annual registration process for permissive designation of an “attorney surrogate.” South Carolina’s Rule 1.19, “Succession Planning,” says that lawyers “should prepare written succession plans” in anticipation of their death or disability.

What to do & who can help?

The Ohio guide points to several components of a succession plan, which will help avoid the burden on your family and possible prejudice to your clients if the unexpected happens:

a written agreement with a designated successor lawyer;

information on the status and location of open and closed client files;

information on leases, insurance, key vendors and other details needed to wind up a law practice, if needed.

Here in Ohio, two city bar associations have specific programs and resources. My hometown bar, the Cleveland Metropolitan Bar Association, has a “What-If Preparedness” program, with a site that links to a wealth of material, including forms. The Columbus Bar Association has a program called the “Advance Succession Registry.” Details are here. The ABA likewise has resources and links, including to jurisdiction-specific materials.

Think about the unthinkable

Thinking about death and disability is never easy — for lawyers or anyone else. But coming to grips with these topics and taking action can put your mind at ease that you have protected your clients and minimized a possible future burden on those you love. That’s worth doing, no matter how difficult.

The prohibition against aiding clients in carrying out crimes and frauds has been in the news lately, in connection with the quandary that lawyers find themselves in when attempting to help clients in the marijuana industry — whose conduct may be legal under state law, while remaining illegal under federal law. (We’ve blogged about it previously, here and here.) In this environment, it is useful to consider just what constitutes assisting a client’s crime or fraud, as the Ohio Supreme Court did last week in disbarring a lawyer who helped a divorce client hide assets from her spouse.

Anatomy of a fraud

The charge of violating Ohio’s version of Model Rule 1.2(d) arose out of the lawyer’s participation in a scheme to conceal his client’s marital assets from the client’s husband. Over a three-year period, before and during the divorce proceedings, the client paid the lawyer over $850,000 — not for legal services, but to hide the money from her husband. The client would withdraw cash from her business or personal accounts, and then write a new check, typically for less than $10,000, that she made payable to the lawyer. The lawyer deposited the funds into two client trust accounts.

Eventually, the lawyer wire-transferred more than $800,000 to a Swiss bank account in which the client had the entire beneficial interest. A portion of the funds were also transferred to another account in the Turks and Caicos Islands during the divorce proceedings.

Clear and convincing evidence

The disciplinary panel found that the client’s practice of transferring the funds in small increments was evidence that the client purposely structured the transactions to fly under the radar of banking laws aimed at catching larger illicit money schemes.

Based on requests for admissions that the lawyer failed to respond to, the disciplinary panel also found that the lawyer had agreed to put the money in his client trust account in order to hide the client’s marital assets.

The panel found that the relator had established a violation of Rule 1.2(d) by clear and convincing evidence.

In addition, in a separate count, the panel considered the lawyer’s alleged neglect of another legal matter, in which he accepted $750 to file two civil complaints on behalf of a condo association, but failed to do so. The panel found a violation of Ohio’s version of Model Rule 1.3, requiring a lawyer to act with reasonable diligence in representing a client.

Based on the rule violations, the panel recommended permanent disbarment, the full Board of Professional Conduct adopted the recommendation, and the state supreme court agreed.

Clear cut cases

The lawyer in this case answered the disciplinary complaint against him, but failed to participate further in the administrative proceedings, including failing to respond to requests for admission. That certainly doomed his case and paved the way for the professional death sentence that the supreme court confirmed. But the facts here appeared clear-cut. Unlike the grey area that lawyers are in when they want to represent their medical marijuana clients, the lawyer here was in a situation that was starkly black-and-white .

Discerning the boundaries of Rule 1.2(d)’s prohibition is sometimes hard — but sometimes, it is easy.

About this Blog

The Law for Lawyers Today is a resource for law firms, law departments and lawyers needing information to meet the challenge of practicing ethically and responsibly. Here you’ll find timely updates on legal ethics, the “law of lawyering,” risk management and legal malpractice, running your legal business— and more.

About Thompson Hine

For more than a century, Thompson Hine has been committed to excellence on behalf of our clients, our people and the communities in which we live and work. Clients rank us among the top firms in the United States for client service year after year, and we are proud of the accolades we have earned in recognition of our capabilities and leadership.